The Federal Opposition has confirmed people will be faced with maximum deductions of just $3,000 for managing their tax affairs under any future Labor Government.
This was confirmed by the Shadow Treasurer, Chris Bowen, who made clear that such a policy move would be central to the Australian Labor Party’s policy to be taken to the next election alongside reforms to negative gearing and capital gains tax (CGT).
Addressing the National Press Club in Canberra, Bowen accused the Turnbull Government of leaving loopholes in the tax system which allowed 48 people in 2014-15 who earned more than $1 million to pay zero tax.
“A staggering nineteen of these people claimed an average of $1.1 million in deductions for the use of the lawyers and tax advisers that helped them pay no tax,” he said. “Compare this to the average person who claimed a deduction, claiming just $378,” he said.
“It’s these sorts of loopholes that Australians are right to feel fed up about. At a time when the Government wants to blow a $65 billion hole in the budget for its corporate tax cut, there is no excuse to not address these inequities.”
Bowen said that a Labor Government would cap managing tax affair deductions at $3,000 per year and that it would raise $1.8 billion over the decade while affecting less than one per cent of all taxpayers.
“Following on from our reforms to negative gearing, capital gains tax, and superannuation, it’s the next step in Labor’s plans to make our tax system fairer,” he said. “These reforms will like our reforms to negative gearing and capital gains help build trust that the tax system is working for everyone, not just a wealthy few.”